P & C Technology Blog

A Word from Our Sponsor

For those of you who don’t come to the blog site or haven’t notice this entry in the “Recent Comments” section here is a word from the site’s sponsor:

“Hello,

This is to comment on the blog in general. You may be wondering how many people read the site. I can tell you that between June 1st and July 31st, there were 1,163 unique visitors to the site. This data comes from Google web analytics. The reports just count visitors and do not provide specific information on visitors. The data excludes visitors that are on the Guidewire network as we filtered this data out. I don't think George would have shared these numbers as he comes from a rare breed, being both a guru in his field and a very modest person.

As you know Guidewire sponsors the site and, as the sponsor, we would like to thank George for his postings to date. Our mutual goal with the site is to provide content that is truly informative and to foster discussion on topics where there is more than one point of view. I think that the quality of George's postings have been insightful and entertaining and I hope that you agree.

Cheers,
Brian

Brian Desmond
VP, Marketing
Guidewire Software
bdesmond@guidewire.com”

I bring this to your attention for a few reasons.  First for those of you that don’t know me I assure you that Brian is correct in characterizing  me as “both a guru….and a very modest person”.  Second, without getting into a love fest, I’d like to go on record that Guidewire has been completely true to its word in providing a forum for me to talk about whatever I choose.  They read the blog at the same time as everyone else.  They have no oversight, let alone any editorial review.  Third, having gotten the backslapping out of the way, I thought you might be interested in the numbers.

Concerning the numbers, Brian’s statistics are only part of the story.  Many folks I know do not visit the site at all, but get the latest posts downloaded to their email.  Further, there are all kinds of secondary networks developing out there whereby recipients of the download forward it to a group of other folks.  There are a bunch of these informal secondary networks in carrier and vendor companies.   So, it seems we are in a growing community, albeit one which is more receptive than reactive.  For example, I got several emails at my CastleBay account concerning the post about “C” Level executives, but no body took me up on the chance to win an iPod (it’s a nice one too) by posting a response at the site.

Talking of iPods, the blog will shortly feature its first “podcast”.  Instead of reading my meanderings you’ll be able to listen to them – on the subject of Billing Systems.  Almost too exciting to bear isn’t it?  Thank you for reading.  Thank you for visiting.  And thank you in advance for listening.

Bye the way, Brian is a really good guy but if you meet him don’t make the mistake of thinking he has a speech impediment or is inebriated, he’s just Irish.

Get with the Program

How often have you heard the phrase “legacy replacement project”?  Fairly regularly I suspect given the current high level of software acquisition and implementation activity.  The problem is the phase is incorrect and misleading.  First, from the purist project management angle a legacy replacement effort is not a single project but a group of related projects which should be more accurately referred to as a “program”.  Second, and more important the use of the term “project” understates the complexity, risk and cost of replacing a core legacy system. 

In reality, replacing a core legacy system consists of at least the following projects:

·                    Select the replacement software

·                    Configure the new system to business requirements

·                    Integrate the new system into the legacy environment

·                    Test the system

·                    Deploy the system

·                    Convert the open claims or in-force policies

·                    Retire the replaced legacy asset

For those of you who might think that these are phases in a single project consider the following points: 

·                    These projects do not follow sequentially one after another, but usually overlap or execute simultaneously - certainly this is true of configuration, integration and various testing phases.

·                    Often these projects will constitute a major program phase – say a multi-state implementation - which is followed by another major phase (group of states) which creates another sequential cascade of overlapping projects.

·                    A project team usually consists of five to twenty resources, a replacement program may have anywhere from five to ten teams which range in size from five to fifteen resources.

·                    A core system replacement initiative is a multi-year effort.  A claims or billing system replacement can reasonably take from one to three years depending on the size and complexity of the carrier’s business operations.  A policy administration system replacement probably won’t take less than two years and may take upwards of five in the largest carrier environments.  What can possibly take this long?  Well if the carrier writes many different lines of business in fifty states the configuration, testing and rollout effort is massive.  Also, some large carriers have over a hundred integration points that must be programmed and tested.

So, get with the program.  These “open heart surgery” type programs are a completely different animal from the usual “large tactical” projects that happen in maintenance environments and need to be handled with far greater rigor.  For the small to medium IT department this often means strengthening the project management infrastructure by:

·                    creation of a Project Management Office

·                    adoption of a project (and program) methodology

·                    development of formal Quality Assurance standards and possibly the introduction of automated test tools

·                    creation of change management and process redesign capabilities.   

Many initiatives of this magnitude fail.  There are no readily available hard numbers, but I have heard serious, knowledgeable people suggest that more than fifty percent fail.  The major causes of failure, in no meaningful order, are:

·                    Lack of senior management support, or change of senior management.  These projects take years, cost millions and drain energy and resources from both the business and IT; they cannot succeed without a sober, long term commitment from the folks at the top.

·                    Choosing an inappropriate vendor, for either a “package” implementation or a build project can be fatal.  Here is the most obvious rule of thumb – if the vendor hasn’t done “it” successfully before, they probably won’t do it successfully for you.  Track record and risk profile and in a directly proportional, negative relationship. 

·                    Scope creep creates bloated, impractical projects and programs that never get finished.  As the saying goes, “the road to Hell is paved with good intentions”.  Major systems programs are like Congressional appropriations.  Everyone see the opportunity to get there pet project done under the broad umbrella of the strategic program.  Rationales such as “there is no point implementing a new policy system without updating all the ISO products” sounds so sensible but it can kill the program.  As can “let’s use this opportunity to create a proper Client view and cleanse all our customer data”.  It’s not that these are inappropriate undertakings, it’s just that they are major, separate initiatives and must be treated as such.   

Here is a rule of thumb to consider when it comes to IT projects:  If it is easy to describe, it is hard to implement.  If it is hard to describe, it is probably impossible to implement”.  Major replacement programs are hard, and can easily become impossible.  Keeping them under control requires constant attention, management rigor and gut level commitment.  Apart from that they are easy.